AUD/USD holds below 0.6350 ahead of Australian employment data
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AUD/USD extends its downside to around 0.6340 in Thursday’s early Asian session.
Trump tariff threats lift the US Dollar against the Aussie.
Investors brace for the Australian January employment data on Thursday.
The AUD/USD pair extends its decline to around 0.6340 during the early Asian session on Thursday. Fresh US President Donald Trump tariff threats continue to underpin the US Dollar (USD) and weigh on the pair.
The strengthening of the Greenback is supported by concerns about escalating trade tensions. Last week, US President Donald Trump ordered his administration to consider imposing reciprocal tariffs on numerous trading partners. Late Tuesday, Trump said that he would likely impose tariffs of around 25% on foreign cars, while semiconductor chips and drugs are set to face higher duties.
"So far, the dollar has tracked the path it had during the previous Trump administration...and we can pretty much agree that Trump is doing exactly what he said," said Chester Ntonifor, chief FX and global fixed income strategist, at BCA Research in Montreal.
The minutes from the FOMC meeting released on Wednesday indicated that the Fed policymakers believe that it is well positioned to take time to assess the outlook for economic activity, the labor market and inflation. Fed officials agreed that inflation must show clear signs of slowing down before any further rate reductions can be made.
The Reserve Bank of Australia (RBA) decided to cut its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% on Tuesday, the first rate cut in four years. The central bank warned that it was too early to declare victory over inflation and was cautious about the prospects of further easing. Investors await the release of Australian January employment data for fresh impetus, which is due later on Thursday.
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